In January, I started an experiment, a savings experiment. The experiment was designed to save money for my “emergency cushion” account without feeling the loss from my pocket or budget. I figured I could probably save about $30 to $50 per month — not much, but not peanuts either. In six months, I hoped to save about $250.

Last week, a month later than I’d originally intended, I deposited the money into my savings account. Before I did, I counted it up to see how much I’d accumulated. I had $723. Wow! And I’d managed to save all of that without even noticing.

I’ll share how I was able to save more than I’d expected, but first I’ll explain how the strategy works. The rules are pretty simple.

Rules of the Game: No Paying With Change
How did I save $723 in seven months without effort? The rules were simple.

Whenever I paid for things in cash, I never used change.

When I got home, I tossed any change in my pocket into a change jar.

That’s it. That’s my super-secret strategy. It’s that simple.

I expected to save a dollar or two per day, nothing more. But this savings strategy quickly ballooned because I inadvertently turned spending into a game.

Important note:I live in Canada where there’s no one-dollar bill. If you want to do this and you live in the States, you’ll want to amend the rules so that $1 bills count as change.

The gamification of personal finance is a new hot topic — along with the gamification of pretty much everything else. The theory behind “gamification” is that if you want people to take an action, you need to harness the same mechanics that make games fun and addictive.

Tossing the coins into the jar was like acquiring a handful of points in a video game, complete with the validating “clink” sound-effect to let me know that I’d done a good job.

Watching the level of the coins rise over time led to a surprising sense of satisfaction and achievement.

There was variability in the progress that I made, but I could influence that variability.

I think it’s that last part that made the biggest difference. The fact that I could change my behavior to “rack up more points” is what made this really feel like a game. I wanted to “level up”!

Leveling Up the Savings Game
Before I go on, I should make a confession: This didn’t actually start as a savings strategy.

I started saving my change because I was annoyed at carrying it around all the time. I dumped pennies, nickels, dimes, and all the rest into a jar just so my money wouldn’t be so annoyingly heavy. But when the coins in the jar started to rise, all of the game mechanics I described above kicked in.

“Hey, I wonder how much money I could save by tossing all of my change in here,” I thought. “I don’t think I’d miss it, so why not give it a chance?”

So I did. Instead of just the smaller change, I put all of my coins in the jar. And I was truly surprised at the feeling of accomplishment and success I gained when I could put a $1 or $2 coin in the jar. It felt like a real “good progress” kind of day!

That’s when I started to change my behavior.

The first thing I noticed was that I was making fewer transactions via debit or credit, and trying to do as much as I could in cash — all so that I’d have more change left over to toss into the jar. I’d actually feel a loss when I made a credit transaction. If the transaction was for, say, $12.97, then I’d feel like “there goes $2.03 that could have gone into the jar!”

I found myself going even further. For instance, I’d adjust my purchase total so that I could get more change. My standing Starbucks order, which cost $4.54, was down-graded a size so that I would have more change for the jar.

At the same time, I’d sometimes find myself adding something small to a purchase so that instead of a total cost of $19.47 ($0.53 change), for example, I’d spend $20.97 ($4.03 change).

It got to the point that whenever I passed by a Laundromat, I’d hop in, slide a $5 bill into the change machine, and have it spit out more coins. Yes, I know it sounds kind of crazy, but it was fun. The result was more and more change into the jar, and more and more satisfaction for me!

Hacking Your Savings and Growth
Okay, what’s this story really all about?

The key takeaway here isn’t that you could adopt my coin jar savings strategy to save $723 in the next seven months without noticing. (Maybe you could, maybe you couldn’t.)

My message is that whatever your goal, you should find a way to turn it into a game, because whereas we do chores because we have to, we play games because we want to. When we want to do something, we often find ourselves doing more and more of it.

This applies to savings and personal finance, but it applies to a lot of other things, too: waking up early, exercising, controlling your diet, and how much television you watch. Heck, if you’re a business owner, it even applies to getting your customers to want to move through your chain of conversion. (Can you tell I’m a marketer?)

Here are the key things to remember when turning your chores into games:

There should be frequent opportunities for action, and immediate feedback.

You should have some way of “racking up points” over time.

You should be able to adjust your behavior and rack up more of those points.

What do you think? Is there an important gamification element that I missed? How do you trick yourself into saving more? And I’m curious: How much have you managed to save with your coin jar?

I just had the kids roll the coins from our change jar (something to do on summer vacation…for one day at least they couldn’t claim to be bored) and we came out with over $30 in just pennies, nickels and dimes. Having teenagers in our house means that quarters, loonies and twoonies don’t make it into the change jar before they are exchanged for slurpies at the 7-11, so I have to hide my stashes of larger change. I love that you made this task into a game. Good idea!

I liked the part about down-grading your Starbucks drink in order to get more change. Not only did you save extra money, but you still got the treat you wanted.

I actually do a very similar thing: I give myself a budget for expenses ($30/week for groceries, etc.) and whatever I don’t spend goes into a little bucket I have (I spent just over $26 today for groceries, so I put around $4 in). I haven’t counted it all yet.

1) Spending more to get change back isn’t “saving”
2) Carrying around change all the time (at least back from a store) is annoying
3) Using credit or debit cards with cash back rewards actually “saves” money rather than using just cash
4) Always carrying cash can lead to it being lost or stolen
5) Money can earn interest if left in a bank rather than at home
6) By wanting to accumulate change it almost creates an environment where you spend more in general to achieve that. You don’t save money by having more physical money (Reminds me of coupons that make you buy things that aren’t nessecary just to “save” money. Such as Groupon)
7) Just budget $120 a month for savings and you’ll come out probably save $30 in real money compared to this scheme.

Those are all good points, Mark (well, most of them) – but this isn’t meant to replace another savings strategy, it’s meant to supplement it. And more importantly, harnessing the game mechanics ends up pushing you to save more than you otherwise would if you automate everything. Just saying…

Yeah, but I hate it when the muggers come out of the dark alley to get me and then run back in!

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Bethsays:

25 August 2011 at 2:47 pm

I’m not even sure where the dark alleys are in my town

(Hello, other Beth )

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Joesays:

25 August 2011 at 6:04 am

This (well not specifically getting mugged, but emergencies) is why I always keep a couple large bills in my wallet, folded up and hidden. I forget I have them sometimes, but its good to have a not insignificant amount of cash on hand when you really need it.

I keep about $20-30 hidden in my car in case I need cash for some reason. I keep a slim wallet and don’t ever carry any cash. I’m not concerned about it being lost/stolen but to me cash is just annoying to carry around.

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Bethsays:

25 August 2011 at 6:36 am

I’m still trying to imagine this scenario. Some junkie threatens you with a knife, you hand over your wallet — and then he proceeds to go through it while you’re still standing there and stab you when he doesn’t get enough cash? (and how much is “enough” anyways? and why didn’t run away when the guy was distracted?)

I think if someone is that desperate for money, they’ll injure you, rob you, then run away.

Speaking as a female here, if I’m alone in a dark alley and some guys comes up to me with a knife, it isn’t my purse I’m worried about.

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Jensays:

24 August 2011 at 7:03 pm

Wow, so serious, you’d think he was talking about doing something, you know, bad!

I liked that your very first point, “Spending more to get change back isn’t ‘saving,’” while true is also not accurate. I do believe he mentioned choosing to spend LESS to get more change.

My college sophomore son did a variation of this last year. He never spent his change and saved it all (I can’t remember, but I think he had >$60 by the end of the school year).

But he also saved his singles. By the end of the first semester he had a goodly stash of singles, which he then used as his spending money for the second semester. Same kid also has a running tab of who owes him money amongst his friends. He’s always got some cash on hand. ;-D

Mark, I’m with you that the money could be growing interest in the bank. I think, however, you’re using Groupon wrong if you’re spending more money than you would otherwise with it. Consider 2 options here:

1) My partner and I will go out twice a month, regardless of the cost. By using Groupon-type sites, we can cut our spending for these dates in half–or at least save some money that otherwise would have been spent.

2) My partner and I will spend $x to go out in a month. If that means we decide to go out four times and keep the amount-per-date low, great. If that means we spend it all at once, fine. Groupon-type sites mean that we can make that $x turn into two dates instead of one.

I have also used it to save on things we would have done anyway–like oil changes, car detailing*, tattoos, and new restaurants we had been hoping to try. You’re not supposed to buy every coupon as it comes up!

* We had a bottle of bleach spill in my car, and the most affordable place gave GREAT service and got the bleach & smell out. I went back to them again after sandy beaches and camping had ground quite a bit of dirt into my car that even the high-powered vacuums at the car wash wasn’t getting out. So when they showed up on Groupon a month later with a coupon that allowed me to get their biggest package for less than their cheapest price, I snatched it up. Not because I went to get it detailed right away, but next time cash is short and someone spills a bottle of bleach in my car (for example, as bleach no longer goes in my car!), the detail work to get it cleaned up is already paid-for. And if it comes to the month that my coupon expires and catastrophe hasn’t yet struck, then I get a cheap car detailing. It’s sort of like insurance, but I get the service once regardless.

I have heard of a “virtual” version of this method of saving, where you simply round up all debits to the nearest dollar in your spreadsheet or budget tracking system, so that over time your real account balance becomes greater than the balance in your spreadsheet. This resolves many of the problems you mention, e.g., keeps the money in the bank from the start, no actual change to carry or deposit, etc. You don’t get that satisfying “plink” of the change landing in the jar, but the savings still build up over time.

I agree with Mark. Using credit cards that auto pay from interest bearing checking will reap more benefits.

Heck, I earn more on interest and rewards than you do, plus it’s a ton less hassle and it’s actually “earnings” and not just accounting tricks.

If you spend a $0.75 and throw $.25 into charge jar, you aren’t earning anything. You are just using tricky accounting to make it feel like you are.

If you spend $0.75 and get 5 cents in rewards and 1 cent on the float you are actually earning 6 cents..

Secondly, nothing says you can’t save that 25 cents. Throw that in a savings account and you earn interest on that. Say you get 1 cents on that after a year. Your up 7 cents and now have 32 cents when you “break up your change jar” instead of 25. That adds up faster than you think.

__I really dislike articles like this__ It’s bad advice. It also takes the “it’s more about the math” way to far. That is true in some things, but in this it’s very simple math and you are doing your readers a huge disservice! It’s about maximizing what you have, not playing Enron with your own books so that you can “feel good” about “saving”.

It’s like fooling yourself that eating a large pizza is ok on your diet because it has some vegetables on it and vegetables are good so it’s OK. Very dishonest.

I use this strategy and I can say it does work. A few points though. I don’t go out of my way to alter amounts to get more change. I use my debit card as much as I can because I don’t like having anything in my pockets. If I am going out for a night i will bring cash but I won’t go out of my way to keep the change. What I do is take whatever change I have in my pockets when I get home and throw it in a jar. If I have 3 cents or 3 buck I dump it in the jar. I don’t get 700 bucks in a few months but I save enough for a night out or a treat once in awhile.

Those are very good points, however I have a Checking account and as I am a college student with my parents helping in part with my college payments and I have my car payment and gas to pay for. I often find that I am paying for gas in cash, and I often even take out a couple dollars from my Checking Account when I know I’m hanging out with my friends… Any coins I end up with goes into a jar in my room.

When I cashed it in over the summer, because I was going to a concert, I had about a hundred dollars in coins. I am again filling my jar with coins, and at the end of every other month I cash them in at my bank, and put them into my account. Sometimes I have ten dollars, which I keep for gas, sometimes I have thirty dollars. It all depends on what coins are in the jar that month.

However, I mainly spend the cash on gas and if I want some sort of food in the house that isn’t on sale at the store. I rarely use my debit card, and my parents and I agreed not to let me have a credit card (bad idea with a bookworm kid who has access to Barnes and Nobles, Amazon, and Books a Million). However I’ve noticed when I’m with my friends I’m not impulsively buying things…. unless I have a gift card to the store then it is just fair game.

We do essentially the same thing with coin change, but we have a wine bottle for storing paper bills. Whenever we buy something with cash (which is almost always), the change goes in the piggy bank and the $1 bills go in the wine bottle.

The last time we emptied both we had $229 in the wine bottle and $94 in the piggy bank in about 3 months. I went to the bank and exchanged for $20s and started a new wine bottle. We are traveling overseas in October so we’ll break open the bottle right before and use as fun money!

The added bonus with the wine bottle is that it’s almost impossible to cheat and grab money out of it

The interesting (troubling? ) thing about this is that it is a “the more you spend, the more you save!” system.

I have a cash budget for pocket money/discretionary spending, which I basically have accepted that I won’t itemize. which is great, until I multiply my weekly allowance and see how many thousands of dollars are just disappearing to lunches, coffee, etc every year!

Similarly, imagine that if your change is $700 after 7 months — what does that mean for your cash spending? Not that it is necessarily bad, just that the bigger number (cash expenses) has a bigger budget impact than the loose change “savings” it produces as a byproduct.

If the money was going to spent anyways (like I mentioned with my groceries), then this is a great way to save. But if you spend more (as he mentioned with adding something small to a purchase in order to increase the amount of change to save), this idea could turn into something far different than what it was originally intended to be.

I’ve paid for many vacations this way. Since, I’m in the U.S. where we do have dollar bills, I also include those as “change”. I have a huge bottle from an office water cooler that I drop the change into every day. I used to keep the dollar bills separate in a box, but the temptation to raid the box was too strong for me. So, I drop those in the bottle too. Getting them back out takes a little work, as does un-wrinkling them. But, it removed the temptation.

You can also play this game with a debit card if you have a card linked to a “keep the change” program like Bank of America offers. All your purchases are rounded up with the extra “change” swept into your savings account. Plus, BofA will match up to 5% of your savings at the end of the year. Free money!

I’m too lazy to roll the coins, so I drag them off to a CoinStar machine. But, that can be a little expensive given their 10%-ish fee.

I get that this is a fun game and that is helpful to motivate savings, but wouldn’t you save more by using a credit card with a cash back rewards program? You would still keep your $700 in change, however now you would get 1-5% cash back (depending on credit card) on all of your purchases.

We primarily use credit cards. THe only cash we spend comes out of our adult allowance, which is $1000 a month (combined) for DH and me. Now we do include coins our kids leave lying around in addition to our own, but we’ve found we generally get back about 5% of that adult allowance every year.

That depends on what is included. Our budget is about $200 for entertainment, meals out, and convenience items – but if you include our gas money, grocery money, and “misc” money (which pays for larger household purchases, co-pays, and such) then it is closer to $1k. It also depends on where you are in life. I assume Mom of five has five kids, so her daily expenses are going to be much higher than childfree folks.

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Mom of fivesays:

24 August 2011 at 3:32 pm

It is rather large by design. We don’t like counting every single penny and our non credit card expenses each month usually come out right around there. It not only includes all meals out, it includes our and the kids’ haircuts, any money given to the kids including school trips or chores, quick trips to a convenience store for milk or bread, pretty much everything that doesn’t fit somewhere else in our budget.

If we’ve dished out a lot on the kids in a given month, our allowance amount runs low and we know we can’t afford to eat out or go to the movies. It may seem like a large amount but it keeps us on track.

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Charlessays:

24 August 2011 at 4:28 pm

$200 for entertainment a little low? My monthly budget is ~$200 for everything beyond rent. Utilities, gas, food, etc. If it wasn’t for the local Food Bank, I wouldn’t make it.

How would you keep the change if you use a credit card? I guess it would make sense if you’re enrolled in some kind of “keep the change” program, but not all cards offer that. Also, I think you’d end up losing out on the game mechanics aspect that really drive the behavior -what do you think?

You don’t keep the change, you get a fixed percentage reward for using the credit card.

So – say you have a generous reward programme with 5% cashback – you’d need to spend $14,460 on the credit card over 7 months to save the same amount. That equates to an annual spend of $25,000, which seems very high for most people.

It’s still gamified, just in a different way. In my opinion, both methods are flawed (in a manner similar to cashback sites), in that spending more = a win. Spending more is never really the answer to building savings in my opinion. I’ve tried the same experiment myself, it ended up with me ‘broke’ 4 months down the line, but with a £500 bottle full of change!

When I say you keep the change, I mean that if you buy something that is $4.50, instead of taking the two quarters and putting it in a jar, it stays in your bank account. All of that additional change would stay in your bank account instead of sitting in a jar. Then you get a cash back % on the $4.50 that you spent.

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Adam Psays:

24 August 2011 at 12:04 pm

I live in Canada (we also don’t have $2 bills anymore, so one and two dollar coins that are heavy and annoying), have been doing this coin collecting for 3 years. I have a small protein shake mix bottle I use to collect it in…and I’m just now filled up after 3 years of change. I estimate about $30 max in there.

After 3 years.

I don’t need to carry and use cash anymore. My credit cards give me cash back and a 30 day interest free loan and allow me to track my spending. 3 major benefits. And I don’t spend 20% more because I’m using a card instead of cash to do it, I just buy what I need like all us GRS regulars.

Cash is clunky, difficult to track the spending of, and just not very efficient for merchants or people.

I hope I live to see them at least get rid of the damn penny like they have in Australia.

Same thing happened to me. Years of saving for about $30. I don’t often spend cash, and when I do it’s at the farmer’s market. I actually have to go to the bank to get change for the laundry machines in my building.

I have friends and family for whom this jar strategy works really well, but in the most part they’re buying coffee and/or lunch every day.

We do essentially the same thing with coin change, but we have a wine bottle for storing paper bills. Whenever we buy something with cash (which is almost always), the change goes in the piggy bank and the $1 bills go in the wine bottle. The money we spend is already allocated in our budgets for eating out, entertainment, gas, etc.

The last time we emptied both we had $229 in the wine bottle and $94 in the piggy bank in about 3 months. I went to the bank and exchanged for $20s and started a new wine bottle. We are traveling overseas in October so we’ll break open the bottle right before and use as fun money!

The added bonus with the wine bottle is that it’s almost impossible to cheat and grab money out of it

Right, this is pretty much what I do, it’s a very effective strategy. Though not a substitute for basic saving, it has a strong psychological and motivational effect, keeping you in touch with your finance plans almost daily.

Several folks I know had a great savings strategy when they were younger. It was called “sit on the couch”. When they sat down the coins would fall out of their pockets (or their friends pockets) then, when it was time for ice cream they’d flip the couch upside down… if the couch mining wasn’t to common… it worked. Ice cream every couple months or so!

Very thought provoking article ; -) Finding ways to save that don’t “hurt” can be very effective.

I used to mine the couch also when I was younger. Then as an adult I used to detail cars for a car dealership. I used to mine the back seats of the vehicles I detailed. I sometimes made great finds there. I think the most I ever found was around $20.00. But on top of the money I found I would find all kinds of cool things. It was very rare to take out the back seat and find absolutely nothing there.

One man’s hassle is another man’s game. The author found saving to be a hassle, felt like he was depriving himself of something, but by turning it into a game he enjoyed the process. He created a system that gave him positive feedback. That there are pitfalls to avoid might be part of the game to him, too.

As a numbers person, I get positive feedback watching my balance sheet change month to month and count coins as a hassle, too, but most people wouldn’t feel the reward I do whenever I hit a milestone in savings. I don’t see this as much different than what I go through when I’m close to saving $x.xx and skimp a little just to reach it.

With all the talk here in the US about doing away with the penny, here is a good use for them. I like the idea of saving loose change becuase it’s nearly effortless. That said, I think it’s possible to take it too far and let mindless spending take over. Saving loose change, as long as it’s within your spending plan/budget is a great way to surprise yourself with how it adds up in a short time.

My variation on this game is that all the change that goes in my piggy bank is either picked up (yes, I’m one of those annoying people who will stop and pick up a beat-up, filthy penny from the ground) or from cashing in my soda bottles at the grocery store. I don’t add change from spending, because I track my budget to the penny. “Found” money, OTOH, goes into the bank. I empty it on New Year’s Day. I only started this in Fall 2010 so I don’t know how much I’ll have on 01/01/12, but last year it was just under $10. Looking forward to seeing how much it is for 2011.

I’m frugal enough to pick a lost penny off of the floor, but this plan makes no sense. I pay cash for almost nothing, preferring to rack up points on my Discover card that I pay off every month. I have to pay cash at my job, but that’s because they let us buy products at cost. I always spend any coins I have.

How is using your coins as quickly as possible any different than not using them for months? You’ll end up with the same amount of money! It’s not like that jar or wine bottle is earning interest.

A lot of people have mentioned interest in the comments, but let’s be real for a second – the interest on a couple hundred dollars for the few months that the coins are in the jar are marginal.

The point here isn’t to maximize savings with interest, but rather to harness the game mechanics to get you to save more. You’re assuming that the behavior would occur regardless, but that just isn’t the case.

@#62 Danny (and #18 and many others) – i totally agree. I think many people are missing the point. Yes, if someone has enough discipline to make purchases from their debit card, and not spend that change (or, as implied by many, transfer the change to savings), this is a silly post. But the point is that…. MOST PEOPLE DO NOT HAVE THAT LEVEL OF DISCIPLINE.

I’m a regular GRS reader, tho i do not comment often, and it seems to me that many regular, long-time readers *forget* that not EVERYONE reading GRS has their financial house in order. We are all at various stages. Maybe I’ve been reading too much Ramit, but if something is not applicable to you: look deeper, and try to find a way it does apply, or dont worry about it. If this is working for someone (and 700 dollars says it does!), then that is great!

Spending lots of cash, does not necessarily mean a person is spending foolishly. I personally use a great rewards card for almost all spending, but when i was on an all cash diet, the exact method outlined by the author worked for me.

My coin jar doesn’t accumulate a whole lot, but I keep it anyways because it forces me to pay attention to small change. It always has a home, and it doesn’t get lost or cluttered.

I like this habit, though I’m sure it will be more effective when I’m not dealing with coin laundry

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Mom of fivesays:

24 August 2011 at 1:18 pm

This is part of our Christmas fund. We normally save between $500 and $600 each year. We use coins only. My husband and I put all our change in there and if the kids leave any coins lying around our kitchen/living area it goes in there as well.

I turn the coins into the Coinstar and get an Amazon gift card. There’s no charge and it’s as good as cash to me.

My goal this year is to use the coin jar and credit points for ALL of our Christmas shopping. We’ll see.

Years ago, when I used cash and went out for lunch, I used the same method. I never carried coin and threw my change into a jar. I averaged 40-50 per month in change. I would deposit the change in my savings account and eventually invested it. It was easy and I almost didn’t miss it.

I did this last year for a few months and ended up with $82. The rule I had was that I couldn’t pay for anything with change and that really racked things up. I had a full jar in no time. I have to say your Important Note is actually great. I never threw in the singles. Then again, I save the singles from my cash purchases to pay the kids their allowances so I guess that’s another way of saving money to a small degree. I also remember turning it into a game of sorts. I remember I was “feeding the piggy” LOL It sounds so stupid but I totally did think that way. Now that I think about it, my poor piggy must be starving!

I use four buckets for when I get home, Quarters, Dimes, Nickels and pennies. When the cups are full I roll them except for the pennies which I take to the coinstar to buy I-Tunes gift cards for my wife. Pre-sorted makes for easier rolling.

I save all my change too, but we rarely use cash except for milk and haircuts (the places we go to only take cash). My piggy bank (same one from childhood) holds all our coins – when it gets full I cash it in. Of course, since we rarey use cash it takes about 6-7 months and we get between $45-$60, depending on the penny/quarter ratio.

I’m sorry but I don’t get it. How is this saving the money? If you paid for all these transactions with a debit card, or a credit card(and paid it off every month), this $723 money would be sitting in your account anyway. In my mind this not saving. It is a false sense of saving. You did not accumulate $723 by spending less or by earning more. If filling up gas tank in your car costs $49.52, you are paying $50 and falsely feeling that you save 48 cents by paying cash, instead of paying $49.52 on credit/debit card. In both instances the tank of gas costs you $49.52 in real money. How did you save 48 cents on this transaction again?

You don’t “save” the 48 cents in your example as you would in a savings account. But, you do eliminate the temptation to spend that portion on something else or have it sit in a checking account. Those small decisions over the course of 7 months do truly add up. Also, if you’re rounding up, you might tend to make more frugal decisions with your remaining cash going forward. The tough part is not bending your budget to go get more cash to spend.

Are you saying that a coin jar does not count as a savings account? You’re right that its not at a bank. But since you say it would just be sitting in his checking account, it wouldn’t be “saved” that way either until he transferred to a savings account. Money sitting in checking is tempting, in my book. And I have *awesome* self-discipline.

The difference between a coin jar and a savings account is that in a savings account your money earns interest. Not much, but it’s better than nothing. If, on the other hand, you leave your money in a coin jar, then a) it won’t earn any interest and will be eventually devoured by inflation, and b) it will cost you time, energy and maybe even some money (if you use Coinstar) to exchange the coins into “real” money or to deposit them at the bank.

Yours is the same kind of logic a certain personal finance writer used when she advised all her readers to stash their cash in their tampon boxes… :facepalm:

A tampon box? Aren’t we all greener than that at GRS too?
I think you may have misunderstood me. I’m not saying he SHOULDN’T put it in a savings account. he definitely should.
But whether the money grows in checking or in a jar, either way its not getting interest until it is TRANSFERRED. i think we’re getting a little persnickety here. Interest is a GOOD thing – if you can manage to save anything at all. Which he did.

I appreciate your post because it’s a good reminder that little things do add up. Without making any specific adjustments to how I spend and shop, I collect and save enough change to fill up my ceramic bank every few months. By the time it’s full, I’ve painlessly gathered about $30, just by filling it with miscellaneous change. You never know when an “extra” $30 is going to come in handy.

Kudos on downgrading your standing Starbucks order – that probably saved quite a bit in the long run. However, you sabotaged your own experiment by deliberately getting change for your change jar (e.g., breaking $5 bills at laundromats) and getting more change on purpose by increasing the total cost of your purchases ($19.47 -> $20.97). Depending on how much you did the latter, you probably ended up unnecessarily spending most of the money you claim to have saved. By the way, does that mean you’d get all $4.03 in change (as in coins)? Because that would probably make your local retailers (or at least cashiers) hate you because you’d take up more time at the register and make them run out of coins that much faster.

Basically, while I applaud the basic idea, it appears that you ran into the classic behavioral trap found among credit card users. (So much for avoiding credit cards, huh?) In order to get their ~3% cashback or other bonuses, they end up spending more than they would have otherwise – kind of like that scene in Super Troopers where a trooper pours 2 gallons of gas on the ground after filling up his car because he’d get a free hot dog with the purchase of 10 gallons. :^P

GL, it makes sense because all of the money in question comes out of the discretionary part of the budget – it’s money that is going to be spent on fun anyway, and it’s a lot better to spend it on change that goes into the coin jar (which is fun, because it’s a game) than it is to spend it on something that doesn’t add value to your net worth over time.

Oh, I’m just saying that in the long run you’re better off putting the money into a coin jar for later than into an arcade, and if you can get the same fun out of it, then that’s great.

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94

GLsays:

25 August 2011 at 7:18 am

Nope, sorry, still doesn’t make any sense. Let’s dissect your statements, shall we? You’re saying that all the change comes from your discretionary spending. The purpose of saving the change is to save money. Change=good, spending=bad. Am I right so far?

In your article, you said this: “I’d sometimes find myself adding something small to a purchase so that instead of a total cost of $19.47 ($0.53 change), for example, I’d spend $20.97 ($4.03 change).” In other words, you’re spending even more money (which you wouldn’t have spent otherwise) in order to save some money. In this example, you increased your discretionary spending by $1.50 – or 7.7%!!!

If you really want to save money and make sure you’re not wasting it all on unnecessary spending, set up a simple budget or calculate how much money you can spend on fun per day, on average. For example, I allot myself $200 a month, which means I can afford a Netflix subscription and a nice snack every day – or a trip to the movies if I go without fun for a few days. Judging from your other comments (especially #65), you appear to have somewhat of a fetish for coins. There’s nothing wrong with that, but you ought to point it out in your article and market it as more of a “guy with a coin fetish saves coins, hooray!” rather than “Here’s how to save money without effort – except for the part that requires effort.” Then again, I’m not a marketing strategist like you… >_>

Just to clarify, in Canada we have $1 and $2 coins, not bills. So anything under $5 here will always come back in all coins. (So you’re not hassling the cashiers or holding up the line, it’s the normal way of business.)

More general reply to the post:
As for myself, I use cash for used books stores and the farmers’ market, which don’t take cards. Also babysitters still want cash, although I don’t get change back from them! Cash back from bottles, etc almost always comes in coin, as it is usually under $5. We need cash to go to school fundraising events. So although I don’t go out of my way to get coins, I do collect the ones I get and with $1 and $2 coins it adds up to about $60 a year. I put it to debt payment, figuring every little bit helps.

I think it makes perfect sense, at least for Danny. Since it’s all “fun money”, he’s spending the extra $1.50 to ensure that he saves $3.50 more.

Had he not spent the extra $1.50, he probably would have used the leftover bill(s) on another purchase instead of saving a good chunk of it in coins.

In a perfect world, coin jars wouldn’t be necessary… Danny would be able to set aside much of his fun money without playing games, just out of sheer willpower. So in theory GL is right, it doesn’t make sense!

But we don’t live in a perfect world where everyone is a whiz at savings.

Bottom line: Without these games, Danny wouldn’t have $723 burning a hole in his pocket.

I recently my own coin jar system. The purpose of the jar is to come up with emergency cash. We have our emergency fund but always wanted to keep some cash at home. So I decided to fill the jar. But my criteria was to fill it without spending a single penny or changing my budget. We decided to make that money from our own home. We have too much Stuff We made it a game of what all we could sell to raise money. It was like treasure hunt. Now we have much less clutter and a reasonable heavy pig. Win-win.

I always use debit, but I have the Scotia account where everything I spend is rounded up to the next $5 and the “change” goes into a seperate savings account. I usually accumulate about $80 a month in that account.

Oh, wanted to add JD… Some pop up is freezing up my phone. I can’t see what is poping up (because it is not coming up in my computer). May be its my phone thing. Just thought I will let you know. It was fine until yesterday…

Hey, Suba. The technical elves introduced a new feature yesterday: a “slide-in” list of links at the end of posts. That may be causing the problem. If you send me your phone info, I’ll forward it to the technical elves to see if they can figure out the problem.

Ha. I was going to tell you to click the “close” box, but when the page reloaded so I could reply to your comment, the slide-in reappeared. Let me forward your concern to the technical elves…

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68

DreamChaser57says:

24 August 2011 at 4:20 pm

+1 – I find that feature incredibly intrusive and unnecessary. In most posts, links to previous thematically related posts are embedded in the post. Please remove this feature or at least have a “do not show this again” option. Thanks for considering my feedback.

we’ve been dropping our pocket change in a coffee can for the last 18 months or so. we need a new couch badly and figured this was the least painful way to finance one! so far we have rolled and deposited $400 in coins, and it’s almost full again (which will be about another $100).
we aren’t so strict with rules, i’m not going to be a jerk and make the cashier give me 98 cents but we both empty our pockets/purse every couple of days into it, and it adds up fast. occasionally dollar bills get thrown in, but they tend to get skimmed for a quick couple of bucks to run to the store with.

If you have a checking account with Bank of America and sign up for the “Keep the change” program, they sweep the change for every debit transaction into your checking account. They also contribute a little bit but I think you only get that once a year.

Same game but you don’t have to carry around the change, don’t have to take it to the bank and you get a little extra free money, too.

I have a similar project going. I work as a barista and dump my daily coin tips into a jar. So far this month I’ve made $15 in change. I’ve also started saving the larger bills (5s and up) in a money pouch and packing the $1s into my wallet to spend. So far it’s working pretty well. I’ve saved $200 in larger bills in the last 30 days alone.

I rarely use cash, but picked up on the idea of keeping a register of all purchases, bill payments, etc., (whether debit or credit, both earn rewards, as well) and rounding up each item to the nearest dollar. I also ignore bonus income like the rewards from my bank’s Green Sense program ($.10 for each debit card payment deposited monthly).

It doesn’t help save money in the sense of cutting costs – it’s basically tricking yourself in to thinking you have spent more/have less money available than you actually do, which has really helped me save faster than I would have otherwise. Just using the past month as an example, I’ve accrued about $175 this way, making only purchase I would have made regardless. Once every month or so, I move this hidden money to one of my targeted savings accounts

I’m still kind of ticked off at my ex who, when he moved out, left behind his gigantic bottle of pennies in the closet. I couldn’t move it. Ended up offering to a handyman a few years later, he could pick the darn thing up. At least it’s out of my house.

I use a old fashioned looking piggie bank. I’ve been doing this since I was little. I saw “Ma” make “Pa” put his change in the jar on the mantle in “Little House on the Prairie” and I’ve been doing it ever since. No big bottles though.

My new husband brought a giant bottle of pennies–one of those glass 5 gallon water bottles–into our house. He moved it around a few times. It eventually broke.

I finally picked out the glass and dumped the money into a plastic bucket. Then I took it bit by bit to the bank. I ended up depositing nearly $200.

We also save coins in a jar. When the jar is full, we give it to a neighbor who is on a limited fixed income. He loves looking through the coins, pulling out interesting ones (he once found a two headed nickel) then using the money for whatever he needs.

We save change and then buy gift cards at the Coinstar machine (rolling coins is the pits, and we don’t use a bank with a coin counter) at Christmas. My favorite thing to do with extra money whether it comes in a paycheck or by selling stuff, however, is to put it into my Smartypig accounts because I love seeing those percentages go up.

Problem with this theory is that most folks don’t use paper money as much as we used to. I rarely have more than $10 cash on hand at anytime. Back in the day I used to collect nearly $1000 by Christmas in the 5 gallon water barrel, just doesn’t work anymore for me. Thanks for the article anyhow just a decade too late.

Ah, coins allow people to shop where debit cards and credit cards can never go. We store up coins all year long, and by summer usually have $30 to $50 in quarters alone. I take those quarters with me to yard sales, which is where I do most of my back-to-school clothes shopping.

Yard sales definitely save money over buying in stores (for example, yes, I buy all my sons’ clothing for just $30 a year). Having quarters ready at hand saves time while I’m yard sale-ing.

Just did the same thing for one month, with just dollar bills and change. Since the kiddo moved back home, I charge him when I do his laundry. Now before any of you go nuts, his clothes go into a partial load to make it a full load, but because I do it, I charge him. If he does his own, no charge. I switched to a smaller wallet and the change would pool at the bottom of my purse and I’d scoop it out and put in the the jar. In one month, with NO extra spending, I banked 49 dollars. The jar is empty and I’m about to start again.

I don’t do Starbucks anymore, but did by some nice beans and make my treat coffee at home. My niece works at the frozen yogurt place and that’s been my summer treat. It’s been a nice lowkey summer money wise and I am happy for that.

My version of this game is also a spinoff from another poster’s “paper chain” idea (They created a paperchain of all their debt with each link being $100. They would rip off a chain each time they paid that much off.)

I am debt-free so I’m working on my savings. I figured out how much I would need for both a 6-month emergency fund and 20% down for the house I want.

I made a wall collage of paperclips strung together and every time I am able to move $100 into my savings account, I get to remove a paperclip and put it in a jar.

It’s made a huge impact on how quickly I’ve been saving. I think about each dollar I spend, knowing that they all add up to a paperclip!

This “strategy” is completly useless. Here in Germany I get 2,05% interest rate on money I have on my credit card. When I go to the atm the money is taken from my cc. So every withdrawel I do will cost me interest.

Now actually with this game you remove liquidity from your cash which you would need to buy things. But it isn’t the case that you stop buying things cause you have no cash in your pocket. So what do you do? You go to the atm and withdraw money from there, money that would give you 2,05% interest (or whatever rate you got on your account over there). So actually you just cycle money from your bank to you to your jar. You are not “saving” money, you are denying interest rate.

My money saving tips include saving all $5 bills (you get so few of them, yet who would miss a 5?) and every time I write a check, I round it up to the next full dollar amount. So, in the checking account, I slowly accrue, on average, 50 cents every check I write. At the end of the year, it’s like $100!

I route virtually every purchase through credit cards with cash rewards bonus points, even my utilities. Yes, I pay the cards off every month. But here’s how I really make the cash jar sing–I put all those cash rewards into the jar, as well as putting change in there. At least one of the cards sends you an automatic check when the rewards reach $100. This works so well I even hesitated when JD mentioned the British Airways 2-free-tickets award a while back–I had to calculate whether it would actually be worth it (it was).

Anyway, if you don’t have trouble using plastic, the cash rewards (if saved) can really accumulate fast.

Spending to save is counter productive. It reminds me of my mother literally spending to achieve tax deductions for her home business. Buying an unneeded item for 66% so you can recieve a 33% return is still paying 66% more then you needed too.

The round up to the next dollar, type mind games also seem to be bad advice. Rounding up would ruin your financial records when you decide to take an accounting of spending by type. Yes we are talking pennies but pennies become dollars. Data should be accurate to get a true picture of your finances. Savings and spending numbers should be clear…not muddied by savings mind games.

I have found following JD’s advice to the letter on automation and multiple savings accounts has worked wonders for me. I have created various ING savings accounts and have set automatic transfers setup into these accounts. When I get the savings bug and want to increase my contributions or setup another account I do that by making a change to these transfers.

All of my bills are paid by automatic withdrawl. Meaning my incoming and outgoing is about as boring as possible.

That being said I understand the desire to make finance something more then it is. The desire to make it a game…make it emotional…make it a something visual that can be heard/felt/touched. I like the debt/savings chains that have been mentioned. That suggestion seems to be an excellent way to monitor progress.

I wanted to come back and leave a post comment on this post after today’s contentious post about U.S. economics policy. When I first started reading through it, I thought it sounded really silly as a saving tactic–but Danny totally practice what J.D. wrote about a little while ago on good reader stories in terms of drawing out a broader lesson that others can try to apply, even if they don’t use this specific strategic. In that light, it was interesting to have the little details (like getting change from the laundromat) included for those that were interested in trying this specifically, but for me, it inspired to consider how I might try something similar to create a game for encouraging myself to go to the gym more regularly, for instance. Nice work.

We also use a coin jar. However, any money found lying around the house (which mostly means, in the dryer) goes into the United Thank Offering box in the kitchen. Benefits: no arguing about who the money belongs to (as it now belongs to God which makes this a difficult argument to win) and people are motivated to clean out their pockets before putting clothes into the laundry.

Research shows you’ll spend 20% less if you spend with cash anyway. Additionally, the act of counting out the dollars adds to the thinking process of “Do I really want / need this?” So, with cash you’ll spend less and save even more.

What is interesting is how much that change adds up; $723 can pay down a lot on your credit cards and it’s a nice start to an emergency fund, if not to add to the one you already have.

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